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IET-317

Financial Analysis Homework


This report must be typed
This assignment is worth 2 homework assignments
This assignment cannot be dropped
Select a company that trades on one of the stock exchanges. Do not select Microsoft. Obtain
the companys latest annual financial report from the internet.
For the company that you have chosen, answer the following questions. Type the question and
then the answer.
1. General information about the company you are analyzing
a. What is the name of your company?
I have chosen UNDER ARMOUR, INC. (UA) is a company which operating in Clothing
store industry..
b. Paste the website address where you found the annual report for your company.
The latest annual report of UNDER ARMOUR, INC. is in 2014. I have found in these
link:
1) http://files.shareholder.com/downloads/UARM/1481462460x0x816471/3BEBC664-8584-4F22-AC0B844CB2949814/UA_2014_Annual_Report.PDF
2) http://www.uabiz.com/secfiling.cfm?filingID=1336917-15-6

b. What business is your company in?


Under Armour, Inc., together with its subsidiaries, develops, markets, and distributes
branded performance apparel, footwear, and accessories for men, women, and youth
primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific
c. Which stock exchange does your company trade on?
UNDER ARMOUR, INCs common Stock is traded on the New York Stock Exchange
(NYSE).
d. What symbol does your company trade under on the stock exchange?
UNDER ARMOUR, INCs common Stock is traded on the New York Stock Exchange
(NYSE) under the symbol UA.
f. What accounting firm provided the independent audit for their annual report?
On 20 February 2015, the audit report was issued for the annual report 2014. The
independent audit for UNDER ARMOUR, INCs annual report is PricewaterhouseCoopers LLP

g. What was the auditors opinion? Quote the exact auditors opinion related to GAAP.
(20 points)
On Report of Independent Registered Public Accounting Firm dated 20 February
2016, PricewaterhouseCoopers LLPs provide auditors opinion:
In our opinion, the consolidated financial statements listed in the index appearing under
Item 15(a)(1) present fairly, in all material respects, the financial position of Under Armour,
Inc. and its subsidiaries (theCompany) at December 31, 2014 and December 31, 2013,
and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2014 in conformity with accounting principles generally
accepted in the United States of America. In addition, in our opinion, the financial statement
schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material
respects, the information set forth therein when read in conjunction with the related
consolidated financial statements.
2. Financial Analysis
Use the following Financial Ratios and Measures in your report
a. Working capital
Calculation:
Working capital = Current assets Current liabilities
= (4,185,854 - 1,620,241) = 2,565,613
The companys working capital is $000 2,565,613 of which accounting for 26%
(2,565,613/9,980,140) of the companys total assets. This is significant amount of working
capital as the company maintain huge amount of cash, inventory and accounts receivable. This
make sure the working capital is enough for operation: manufacturing and distributing the
companys products.
b. Current ratio.
Calculation:
Current ratio = Current assets/current liabilities = 4,185,854 / 1,620,241= 2.58
According to Bizminer Clothing store Industry Financial report, current ratio of Textile
Apparel Clothing industry in 2014 is from 2.37. With the current ratio of 2.58 of the company is
greater than the average in industry, V.F. Corporation is consider is healthy in liquidity position.
c. Acid test ratio
Calculation:
Acid test ratio = (Current assets - inventories)/ Current liabilities = (4,185,854 - 1,482,804)/
1,620,241= 1.67
According to Bizminer Clothing store Industry Financial report, current ratio of Textile
Apparel Clothing industry in 2014 is from 0.61. With the current ratio 1.67 of the company is
greater than the average in industry, V.F. Corporation is consider is healthy and strong in liquidity
position.
d. Debt ratio
Calculation:
Debt ratio = Total liabilities/total assets = 4,349,258/ 9,980,140 = 44%

In year 2014, the debt ratio of V.F. Corporation is 44%. It means that debt accounts for 44% of
total asset, each $1 of assets there are $0.44 from liability source. The owner equity is greater
than the total liabilities. In the Bizminer report, the Total Liabilities: Net Worth in 2014 of
industry is 1.01 mean the total liability is greater than owner equity. Company to the industry, the
debt position of company is better than the others.
d. Return on Sales Ratio
Calculation:
Return on Sales Ratio = Net profit/Net sales = 1,047,505/ 12,154,784 = 8.6%
In 2014, The Return on Sales Ratio of Clothing industry according to the Bizminer report is
2.94%. While in 2014, the Return on Sales of VFC 8.6%. It is much higher than the industry
average. As a result, the companys performance is outstanding.
e. Inventory turnover ratio
Calculation:
Inventory turnover ratio = Cost of goods sold/ Average Inventory = 6,288,190 /(( 1,482,804 +
1,399,062)/2) = 4.36
According to Bizminer Clothing store Industry Financial report, Inventory turnover ratio of
Textile Apparel Clothing industry in 2014 is from 2.84. With the Inventory turnover ratio 4.36
of the company is greater than the average in industry, V.F. Corporation is consider is good in
managing its working capital.
g. Debt/equity ratio.
Calculation:
Debt/equity ratio = Total liability / Total Owner Equity = $4,349,258/ 5,630,882 = $0.77
According to Bizminer Clothing store Industry Financial report, Debt/equity ratio of Textile
Apparel Clothing industry in 2014 is from 1.01. With the Debt/equity ratio 0.77 of the company
is lower than the average in industry, V.F. Corporation borrow less than the others does. It mean
the company is less depend on the outside source of finance.
3. Current Data. Using Yahoo Finance (http://finance.yahoo.com/) or some other financial
source, give the current stock price per share, P/E ratio, and trading volume of the companys
stock. Give the date that you found this data (10 points).
The information of UNDER ARMOUR, INC in Yahoo Finance which was found on 9 February
2016, as follow: http://finance.yahoo.com/q?uhb=uh3_finance_vert&fr=&type=2button&s=UA
%2C
- Current stock price per share: $72.56, Previous close: 77.33, Open: 76. 36
- P/E: 24.55
- Trading volume: 4,769,587

4. Your Opinion. Based on your analysis, what is your opinion of your company? (20 points)
According to the company financial ratios and the industry average from Bizminer
report. With healthy in liquidity position: current ratio and acid test ratio both greater than
1, the company is ready to settle any current liability.
In addition the return on sale is 8.6% is considered is outstanding compare to its
competitor in industry, this is potential for improvement in stock value.
To generate the profit, the company use source of finance from equity not liability. This
has advantage of less interest expense and more profit retained for stock holders. Lower
level of liability Debt/equity ratio = 0.77 mean the lower risk the company faced.
In summary, the company is good in financial aspect with high return and low risk.

5. Copies of Balance Sheet and Income Statement.